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Wednesday, April 11, 2007

While North Korea is almost certain to miss a Saturday deadline to shut the reactor at the heart of its nuclear programme, it is unlikely to derail a breakthrough disarmament deal, analysts said on Wednesday.

North Korea was to close the Yongbyon reactor within 60 days of the Feb. 13 agreement in exchange for energy aid and security guarantees, but has refused to do so until it receives assets frozen at a Macau bank over money-laundering allegations.

"The deadline will be postponed to sometime in the future, but I don't think there will be any kind of fundamental damage to the agreement," said Ruan Zongze, a senior fellow at the China Institute of International Studies.

At the same time, he said, dragging out the obligations for much longer would risk losing momentum towards disarmament generated by the accord, reached after laborious six-party negotiations between North and South Korea, the United States, host China, Japan and Russia.

As part of the deal, Washington agreed to resolve the issue of the $25 million in funds frozen at Macau's Banco Delta Asia within 30 days, but freeing the money has been fraught with technical problems.

On Tuesday, the United States said Macau authorities had unblocked the funds, but it remained unclear how North Korea could access the money or if Pyongyang was satisfied with the arrangement.

"It still, at this point in time, looks like a minor setback," Peter Beck, a Korea analyst at the International Crisis Group, said of the deadline.

"We won't know until later whether this is an indicator of North Korea's true intentions, which are to drag its feet as long as possible, or whether they're just standing up to principle and saying 'hey, you promised us this money in 30 days'," he said.

MANAGING EXPECTATIONS

Shutting down the reactor is still theoretically possible by Saturday, but the action would have to be verified by U.N. inspectors and Washington and Beijing have been playing down the importance of the 60-day timeframe.

"I don't agree that because of some delays in the initial stage the six-party talks will fail or be annulled," Chinese Foreign Ministry spokesman Qin Gang told a news conference.

U.S. State Department spokesman Sean McCormack said everyone should "act in such a way that they intend to meet the 60-day deadline" but added that it may not be technically possible.

Analysts said the collective willingness to be flexible was more important than the date itself.

"If the U.S. and DPRK concur that they are both happy with a soft deadline that retains the substance but moves it back a few weeks, then ... we will still be in agreement," said Peter Hayes, executive director of the Nautilus Institute, a think-tank that focuses on North Korea.

"The reality is that the substance is more important than the form in this case, so the form will shift if it has to."

DPRK stands for the Democratic People's Republic of Korea, North Korea's official name.

But the deadline will have to be met sooner than later if the other five countries hope to move North Korea beyond a shutdown and towards the next stage of the deal, which would entail a complete dismantling of its nuclear programme.

Whether U.S. chief negotiator Christopher Hill, in Asia to refocus attention on the disarmament plan, meets his North Korean counterpart Kim Kye-gwan in Beijing later this week could be an indication of the North's intentions.

It would "symbolically show that the two sides are committed to moving forward", said Beck. "It's certainly a bad omen that something we thought would be relatively easy to resolve has led to a standstill in the talks."